National Institute of Business Management

Answer:Directing or Direction function is said to be the heart of management of process and therefore is the central point around which accomplishment of goals take place. Directions are the function which is the starting point of the work performance of subordinates. It is from this function the action takes placing, subordinates understand their jobs and do according to the instructions laid. Whatever are plans laid, can be implemented only once the actual work starts. It is there that direction becomes beneficial. Through direction, the superiors are able to guide, inspire and instruct the subordinates to work. For this, efforts of every individual towards accomplishment of goals are required. It is through direction the efforts of every department can be related and integrated with others. This can be done through persuasive leadership and effective communication. Integration of efforts brings effectiveness and stability in a concern.

Direction function helps in achievement of goals. A manager makes use of the element of motivation here to improve the performances of subordinates. This can be done by providing incentives or compensation, whether monetary or non – monetary, which serves as a “Morale booster” to the subordinates Motivation is also helpful for the subordinates to give the best of their abilities which ultimately helps in growth. Stability and balance in concern becomes very important for long term sun survival in the market. This can be brought upon by the managers with the help of four tools or elements of direction function – judicious blend of persuasive leadership, effective communication, strict supervision and efficient motivation. Stability is very important since that is an index of growth of an enterprise. Therefore a manager can use of all the four traits in him so that performance standards can be maintained. It is a human behavior that human beings show resistance to change.

Adaptability with changing environment helps in sustaining planned growth and becoming a market leader. It is directing function which is of use to meet with changes in environment, both internal as external. Effective communication helps in coping up with the changes. It is the role of manager here to communicate the nature and contents of changes very clearly to the subordinates. This helps in clarifications, easy adoptions and smooth running of an enterprise. For example, if a concern shifts from handlooms to power looms, an important change in technique of production takes place. The resulting factors are less of manpower and more of machinery. This can be resisted by the subordinates. The manager here can explain that the change was in the benefit of the subordinates. Through more mechanization, production increases and thereby the profits. Indirectly, the subordinates are benefited out of that in form of higher remuneration. Direction finance helps in clarifying the role of every subordinate towards his work.

The resources can be utilized properly only when less of wastages, duplication of efforts, overlapping of performances, etc. don’t take place. Through direction, the role of subordinates become clear as manager makes use of his supervisory, the guidance, the instructions and motivation skill to inspire the subordinates. This helps in maximum possible utilization of resources of men, machine, materials and money which helps in reducing costs and increasing profits. Directing involves guiding, inspiring and leading people so that they accomplish predetermined objectives. If the directing function is done well, work in an organization is efficiently and effectively done. The function of directing influences the subordinates and motivates them into meeting the organization’s goals. Directing function deals with human factor which is complex and therefore presents challenges to directors. After giving people orders on how things are supposed to be done it is essential that it is ensured that the orders are carried out.

Managers by the function of directing are able to control and influence the actions of the subordinates. After assembling the factors of production and formulating the rules and procedures by the directors, the subordinates are directed into finalizing the process of production. After all the necessary planning, organizing and staffing the organization is in place, management now gets things done by way of directing the subordinates. Directing ensures that subordinates carry out duties as required. Poor directing function can lead to spoiling an otherwise good planning, organizing and staffing process which would make the meeting of goals and objectives of the organization difficult. Directing function is the basis of management process and the accomplishment of goals depends on this. This function is also known as actuating function of management as an enterprise’s running really begins on the direction. Several benefits are provided to an organization because direction is the central point of an organization and they are as follows: a. Directing initiates actions: Directions is the beginning of the subordinate’s execution of their work.

Actions begin right from this function onward as the employees learn their jobs and carry out the proper instructions that are given to them. Plans which are made can be carried out only after the actual job begins and it is only then that the direction turns out to be helpful. b. Directing integrates efforts: The superiors are capable of directing, inspiring and instructing the employees to work only by directing. To do this, every person needs to work hard in order to accomplish the goals of an organization. Every department’s efforts can be easily connected and included along with the other departments through proper direction. This can also be achieved through influential leadership and efficient communication. A concern achieves certain stability only through effectively incorporating all the efforts made by all. c. Directing is a means of motivation: The function of direction aids in achieving all the goals effectively. A manager uses this motivation factor effectively in order to enhance the employee’s performance in the organization.

This can be easily achieved by giving proper salaries or rewards and this in turn enables to help as a sort of ‘’Morale Booster’’ for the employees in an organization. The employees can do their best through effective motivation and this in turn aids in the eventual expansion of an organization. d. Directing provides stability: An organization’s balance and constancy is very vital for surviving in the market in the long run. The managers can achieve this effectively by using four tools or essentials of direction, cautiously blending influential leadership skills, able communication, a firm command and also a well-organized motivation. Stability is very vital as it is an indication of the enterprise’s expansion. Hence, a manager can utilize all the four traits within himself in order to uphold the standards of performance of an organization. e. Directing will enable to cope with the changes: It is normal for humans to resist any new changes that are brought in an organization.

However, in order to become a leader in the market, it is important to able to adapt oneself to the ever-changing environment which in turn aids in supporting planned growth of an organization. The function of direction is necessary for meeting the new challenges in a fast-changing environment, both internally and externally. The changes in an environment can be managed easily through effective communication. The manager’s role is to effectively communicate all the contents and nature of new modifications explicitly to the employees. This aids in clarifying, easily adapting and an enterprise’s smooth functioning. For instance, if an enterprise changes from handlooms to doing power looms, it is necessary to bring about a vital change in the methods of production. This results in a decrease of human labor and an increase in using more machines for this purpose. Hence, in this case, the manager can explain to his employees that it is important to bring about this change in order to benefit them.

Production increases as a result of utilization of more machines and this in turn results in more profits for the enterprise. Hence, the subordinates are benefited indirectly through this change in the form of high salaries being given to them. f. Directing helps in efficient utilization of resources: The proper direction of money aids in defining the roles and responsibilities of all the employees towards their own work. Utilization of resources can be effectively done only when there is no duplication of any efforts, no wastage, overlapping of achievements and so on. The roles of employees become defined only through proper direction as the manager uses his control, guiding and instructional abilities and skills of motivating and inspiring all his subordinates in the organization. This aids in the greatest employment of resources pertaining to humans, materials, machines and finance and this further aids in cost reduction and an increase in profits of an organization.

Question 2: Discuss the importance of Coordination in managerial functions. Answer: Co-ordination is the unification, integration, synchronization of the efforts of group members so as to provide unity of action in the pursuit of common goals. It is a hidden force which binds all the other functions of management. Management seeks to achieve co-ordination through its basic functions of planning, organizing, staffing, directing and controlling. That is why; co-ordination is not a separate function of management because achieving of harmony between individuals efforts towards achievement of group goals is a key to success of management. Co-ordination is the essence of management and is implicit and inherent in all functions of management. A manager can be compared to an orchestra conductor since both of them have to create rhythm and unity in the activities of group members. Coordination can be defined as “Synchronization of efforts from the stand-point of time and the sequence of execution”.

Coordination is the base or primary function of every manager because various departments of an organization are working independently and there is need to relate and integrate their activities. i. In planning coordination is required between main plan and supportive plans of different departments. ii. In organizing coordination is required between different resources of an organization and also between authority responsibility and accountability. iii. In staffing coordination is required between skill of a person and job assigned to him, between efficiency and compensation etc. iv. In directing function coordination is required between superior and subordinates, between orders, instructions, guidelines and suggestions etc. v. In controlling function coordination is required between standards and actual performance. vi. Top level requires coordination to integrate all the activities of organization and lead the efforts of all the individuals in one common direction. vii. Coordination is required at middle level to balance the activities of different departments so that these can work as a part of one organization only. viii. Lower level requires coordination to integrate the activities of workers towards achievement of organizational objectives. Coordination provides the flowing benefits:

a. Higher Efficiency and Economy: Coordination helps to improve the efficiency of operations by avoiding overlapping efforts and duplication of work. Integration and balancing of individual efforts provide a smooth and harmonious team work. Coordination is a creative force which makes possible a total result which is greater than the sum of individual achievements. This is the synergetic effect coordination. Coordination enables an organization to rake optimum use of its resources. The success of organized Endeavour depends upon the quality of coordination. In fact, coordination is the first principle of organization as it expresses the principle of organization in to. The quality of coordination is the crucial factor in the survival of an organization. b. Good Human Relations: Besides promoting the efficiency of operations, coordination improves the morale and job satisfaction of employees. Composite and orderly effort established through team spirit and executive leadership enables employees to derive a sense of security and personal contentment from their job. A well-coordinated organization can attract, retain and utilize better personnel.

Coordination improves human relations by reconciling individual and organizational objectives. c. Unity of direction: Coordination helps to ensure unity of action in the face of disruptive forces. By welding together different departments and sections into one entity, coordination ensures the stability and growth of an organization. It enables the executives to see the enterprise as a whole instead of narrow sectional goals. Individual interests are sub­ordinated to the common interest more easily and effectively. d. Quintessence of management: Coordination is an all inclusive concepts or the end result of the management process. Management is noth­ing more than coordination of all activities, efforts and forces that affect the organization from within and without. Coordination serves as a key to all managerial functions. e. Organizational Effectiveness: Coordination fosters loyalty and commitment among employees. This enhances the effectiveness and stability of the organization.

Thus, coordination is the sine qua non of effective management. f. Coordination encourages team spirit: There exist many conflicts and rivalries between individuals, departments, between a line and staff, etc. Similarly, conflicts are also between individual objectives and organizational objectives. Coordination arranges the work and the objectives in such a way that there are minimum conflicts and rivalries. It encourages the employees to work as a team and achieve the common objectives of the organization. This increases the team spirit of the employees. g. Coordination gives proper direction: There are many departments in the organisation. Each department performs different activities. Coordination integrates (bring together) these activities for achieving the common goals or objectives of the organisation. Thus, coordination gives proper direction to all the departments of the organisation. h. Coordination facilitates motivation: Coordination gives complete freedom to the employees.

It encourages the employees to show initiative. It also gives them many financial and non-financial incentives. Therefore, the employees get job satisfaction, and they are motivated to perform better. i. Coordination makes optimum utilisation of resources: Coordination helps to bring together the human and materials resources of the organisation. It helps to make optimum utilisation of resources. These resources are used to achieve the objectives of the organisation. Coordination also minimise the wastage of resources in the organisation. j. Coordination helps to achieve objectives quickly: Coordination helps to minimise the conflicts, rivalries, wastages, delays and other organisational problems. It ensures smooth working of the organisation. Therefore, with the help of coordination an organisation can achieve its objectives easily and quickly. k. Coordination improves relations in the organization: The Top Level Managers co-ordinates the activities of the Middle Level Managers and develops good relations with them.

Similarly, the Middle Level Managers co-ordinates the activities of the Lower Level Managers and develops good relations with them. Also, the Lower Level Managers co-ordinates the activities of the workers and develops good relations with them. Thus, coordination overall improves the relations in the organisation. l. Coordination leads to higher efficiency: Efficiency is the relationship between Returns and Cost. There will be higher efficiency when the returns are more and the cost is less. Since coordination leads to optimum utilisation of resources it results in more returns and low cost. Thus, coordination leads to higher efficiency. m. Coordination improves goodwill of the organization: Coordination helps an organisation to sell high quality goods and services at lower prices. This improves the goodwill of the organisation and helps it earn a good name and image in the market and corporate world.

Question 3: Explain the methods of Departmentation.
Answer: Organizations are formed when a group of individuals unite to accomplish a specific goal. They are responsible for creating a work environment that best utilizes resources such as people, tasks and technology. But, in order to meet this objective, they will need to create an organizational structure or design. Organizational structure and design include work specialization, departmentalization, chain of command, span of control, centralization and decentralization and common organizational designs. Departmentalization is discussed here.

Departmentation: Grouping of activities is an essential step in designing an organizational structure. Grouping of activities into departments or other homogeneous unit is known as departmentation. Departmentation or departmentalization is the process of grouping tasks into jobs, the combining of jobs into effective work groups and the combining of groups into identifiable groups or departments.

Needs and importance: The basic purpose of departmentation is to make the size of each departmental unit manageable and to secure advantages of specialization. It is necessary on the account of following reasons:

Specialization: Departmentation enables an organization to avail the benefits of specialization. When every department looks after one major function, expertise is developed and efficiency of operation increases.

Expansion: One manager can supervise and direct only a few subordinates. Grouping of activities and personnel into departments makes it possible or the enterprise to expand and grow. If there is no departmentation, the size of the organization will be restricted to the manager’s span of control

Autonomy: Departmentation results in the division of enterprise into semi-autonomous units. In these units, every manager is given adequate freedom. The feeling of autonomy provides job satisfaction and motivation which in turn lead to higher efficiency of operations.

Fixation of responsibilities: Departmentation enables each person to know the specific part he is to play in the total organization. It provides a basis for building up loyalty and commitment. The responsibility for results can be defined more precisely and an individual can be held accountable for performance.

Appraisal: Appraisal of managerial performance becomes easier when specific tasks are assigned to specific personnel. The sources of information, the skills and competence required for total managerial decisions can be located.

Managerial development: Departmentation facilitates communication, coordination and control. It simplifies the training and development of executives y providing them opportunities to take independent decisions and o exercise initiative.

Administrative control: Departmentation is a means of dividing the large and complex organization into small and flexible administrative units. Grouping of activities and personnel into manageable units facilitates administrative control. Standards of performance for each and every department can be precisely determined. Excessive departmentation may result in several organizational problems such as erosion of the line of command, multiple accountability, dysfunctional conflicts and difficulty of coordination and control.

Different Types of Departmentation:
1. Functional departmentation: Functional Departmentalization groups jobs by the functions that they perform. Hence each major or basic function is organized as a separate department. The basic or organic functions are the functions the performance of which is vital and essential to the survival of the organization. For example, key functions of a manufacturing company include production, purchasing, marketing, accounting, and personnel. The functions of a hospital include surgery, psychiatry, nursing, housekeeping, and billing. If necessary, a major function may be divided into minor or sub-functions. A production department’s activities may classified into quality control, processing of materials and repairs and maintenance.

The process of functional differentiation can continue as long as there exists a sound basis for further differentiation. It is the widely used basis for grouping activities and exists almost in every organization at some level. a. Advantages: The main advantages of functional departmentation are as follows: i. It is the most logical, time proven and natural form of departmentation. ii. It provides occupational specialization which makes optimum utilization of manpower. iii. It ensures the performance of all activities necessary for achieving organizational objectives. It gives status to major function. iv. It facilitates delegation of authority.

v. It enables top management to exercise effective control over a limited number of functions. vi. It eliminates costly duplication of effort.
vii. It simplifies training because managers have to be experts only in a narrow range of skills. b. Disadvantages: The following demerits can be drawn for functional departmentation i. There is too much emphasis on specialization. When each employee specializes only in a small part of the job, cannot develop a balanced attitude towards the job as a whole. ii. There may be conflicts between departments as the responsibilities are interdependent and cannot always be clearly delineated. iii. Functional departments may grow in size to justify their cost. Managers may try to build their functional empires. iv. The scope for management development is limited.

Functional managers do not get training and experience for top management positions. Responsibility for results cannot be fixed on any one functional head. v. There may be difficulties in coordinating the activities of different departments. There may be inflexibility and complexity of operations. Committees may be constituted to ensure coordination between functional departments. The functional basis is more useful to large organizations. Very often the functional basis is used at top level and some other basis is applied at lower levels.

2. Product Departmentation: Product Departmentalization jobs are grouped by product line in which each major product area is placed under the authority of a manager whom is responsible for all aspects of the product line. It is useful when product expansion and diversification, manufacturing and marketing characteristic of the product are of primary significance. It is generally employed when the product line is relatively complex and diverse requiring specialized knowledge and a great deal of capital is required for plant and equipment. A I company with diversified product line may have the following divisions. a. Advantages:

i. Product departmentation can reduce the problem of coordination between production and sales activities. All activities concerning a particular product line are integrated together. ii. It focuses individual attention on each product line which facilitates product expansion and diversification. iii. It permits full use of specialized production facilities. Personal skills and specialized knowledge of product managers can be fully utilized. iv. The performance of each product division and its contribution to overall results can be easily evaluated. v. Product managers can be held accountable for the profitability of each product. vi. As each product division is semi-autonomous and contains different functions, product departmentation provides an excellent training ground for top management positions. vii. It is more flexible and adaptable to change.

b. DISADVANTAGES:
i. There is duplication of physical facilities and functions. Each product division maintains its own specialized facilities and personnel due to which operating cost may be high. ii. Advantages of centralization of certain activities like financing, accounting, industrial relations, etc; are not available. iii. There may be underutilization of plant capacity when the demand for a particular product is not adequate. iv. It creates the problem of effective control over product divisions by the top management. v. More persons with general management ability are required. vi. Each product manager asserts his autonomy disregarding the interest of the organization. The choice of product (or service) categories becomes an important component of product departmentation. Products can be grouped according to such diverse criteria as technology (e.g., electronic versus mechanical versus electromechanical), brand (e.g., Noxzema versus Cover Girl), product function (e.g., welding versus grinding equipment), size (e.g., low-volume versus high-volume pumps), and so forth.

These distinctions often become manifest in “product-line” decisions, which, in turn, have organizational implications. 3. Territorial departmentation: Organizations that are spread over a wide area may find advantages in organizing along geographic lines so that all the activities performed in a region are managed together. Bank, insurance companies, transport companies, distribution agencies are examples of such enterprises. The activities are divided into zones, divisions and branches. It is obviously not possible for one functional manager to manage efficiently such widely separated activities this makes it necessary to appoint regional managers for different regions. a. Advantages:

i. It helps in achieving the benefits of local operations. The local managers are more conversant with local customs, preferences, fashions, styles, etc. They can adapt and respond to the local demand situation with speed and accuracy. The enterprise can gain intimate knowledge of conditions in the local markets. ii. It results in saving in freight, rents and labor costs. There are savings in time and money. Therefore, economies of localized operations are available. iii. Every regional manager can specialize in the peculiar problems of his region. iv. There is better coordination of activities in a locality through the setting up of regional division. It provides for effective span of control. v. It facilitates the expansion of business to various regions. vi. It provides opportunities to train managers as they look after the complete operations of a unit. Each regional manager can be given adequate autonomy. b. Disadvantages:

i. Due to geographical distance there is problem of communication.  Geographical departments require more managers with general managerial abilities which may not always be available. ii. There may be friction between regional managers.

iii. All activities of a firm may not be amenable to territorial specialization. iv. Coordination and control of different branches from the head office becomes less effective. v. There is duplication of physical facilities due to which the cost of operation may be high. There is multiplication of personnel, accounting and other services at regional level. 4. Customer departmentation: An organization may find it advantageous to organize according to the types of customers it serves. For example, a distribution company that sells to consumers, government clients, large businesses, and small businesses may decide to base its primary divisions on these different markets. Its personnel can then become proficient in meeting the needs of these different customers. This figure depicts an organization grouped by customers and markets. a. Advantages:

i. Special attention can be given to the particular tastes and preferences of each class of customers. Customers’ satisfaction enhances the goodwill and sales of the enterprise and loyalty of customers. ii. The benefits of specialization can be derived

iii. The enterprise gains intimate knowledge of the needs of each category of customers. b. Disadvantages:
i. As such departmentation is applied only to sales function; there may be difficulties in coordinating the activities of different functions. There is constant pressure from customer department for special treatment. ii. There may be under-utilization of facilities and manpower, particularly during period of low demand. iii. Managers of customer departments may put pressure for special facilities and benefits. iv. It may lead to duplication of activities and heavy overheads.

5. Process or equipment departmentation: Here activities are grouped on the basis of production process or equipment involved. For example: The Plant Superintendent would work in conjunction with the managers of the Materials Department, Assembling Department, Finishing Department and the Inspection Department. a. Advantages:

i. There is clear-cut technical division of work.
ii. This ensures specialization and facilitates training of junior executives. iii. It is possible to appoint persons with special education and experience for each process. iv. Location of similar type of machines in one place result in economies in costs of repairs and maintenance. b. Disadvantages:

i. There may be difficulty in co-ordinary different process department. Conflicts among managers of different processes may arise. ii. It cannot be used where manufacturing does not involve distinct process. iii. It is suitable only for special and composite type of plants.

6. Time departmentation: Another way to departmentalize is to group activities according to the period of time during which work is performed. Many organizations are engaged in round-the-clock operations and departmentalize on the basis of time by having work shifts (day, afternoon, night shift). Shift work can contribute to numerous other employee problems and concerns, including personal safety, sleep deprivation, child care, and work/family conflicts. Night-shift workers often perceive that they are viewed as “second-class citizens” who have limited access to the training and development opportunities afforded to day-shift personnel. 7. Composite or combined departmentation: In order to achieve an effective structure, a supervisor may have to apply several types of departmentation at the same time. This is referred to as “mixed” departmentation.

In practice, many organizations have a composite departmental structure involving functional departmentation, geographic departmentation, and other forms. All of these alternatives may be available to supervisors to facilitate the grouping of activities in their departments 8. Choosing the basis of departmentation: Management must be very careful in choosing the basis of departmentation because once a pattern is chosen it is very difficult and costly to switch over to another pattern. The following factors should be kept in view while selecting a suitable basis of departmentation. a. Specialization:- The activities of an organization should be grouped in such a way that it leads to Specialization of work. This helps to improve efficiency and economy of operations and enables people to become experts. b. Coordination in the performance of different activities is necessary so that they contribute maximum towards the organizational goals. c. Control the departmentation should be such that it facilitates measurement of performance and timely corrective action.

Effective control helps to achieve organizational goals efficiently and economically. d. Cost the pattern and the number of departments should be so decided that maximum possible economy is achieved in the utilization of physical facilities and personnel. e. Special attention the various activities should be given adequate attention so that each necessary activity is performed and there is no unnecessary duplication of activities. f. Local Conditions should be adequately considered in a scheme of decentralization. Departmentation should be adjusted according to available resources. g. Human consideration the existence of informal groups, cultural patterns, value system, etc. should be given due consideration. Attention to human factors will make departmentation more efficient and effective.